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> 40+% of all investors are currently leveraged, which seems like an insane figure This does sound insanely high given how many investors have passive portfoli

> 40+% of all investors are currently leveraged, which seems like an insane figure This does sound insanely high given how many investors have passive portfolios. I'm guessing "leveraged" means something closer to "owns at least one option" than "would be wiped out in a 25% market correction". As for people not being able to make rent if their investments go bad, there aren't many people who are paying their rent out of their personal savings and relying on their investments. Most people work, pay rent out of their earnings, and if they're lucky put some of the excess into savings or brokerage accounts. People with larger savings are likely to own their own home. Of course, if there's a market downturn this will lead to bankruptcies, rent defaults and a knock on effect on landlords, lenders, etc. But the main causal method there is people losing their jobs, not their savings.

skohan 6y ago
> I'm guessing "leveraged" means something closer to "owns at least one option" than "would be wiped out in a 25% market correction". I hope so, but do we know this? My understanding is that apps like Robinhood make it very easy to do options trading, and there's a whole online subculture around this type of trading. Can we actually rule out the possibility that a non-trivial percentage of the recent run-up of the stock market is based on "dumb money" from unsophisticated investors, much of which they may not actually have? edit: Also I just searched Robin-hood options trading on youtube and this video was the second result: https://youtu.be/EQRLRYvRYOM?t=568 https://youtu.be/EQRLRYvRYOM?t=568 I find the UI effect when he finishes the option buy to be very telling, and it's interesting to think about who the intended audience of this content is.
- edoceo 6y ago
  Bloomberg thinks 20% of the market is retail https://www.bloomberg.com/news/articles/2020-09-15/big-investors-are-dying-to-know-what-the-little-guys-are-doing https://www.bloomberg.com/news/articles/2020-09-15/big-inves... I don't think we can rule out dumb money. But also, it's not just retail who's dumb.

skohan 6y ago

> I'm guessing "leveraged" means something closer to "owns at least one option" than "would be wiped out in a 25% market correction". I hope so, but do we know this? My understanding is that apps like Robinhood make it very easy to do options trading, and there's a whole online subculture around this type of trading. Can we actually rule out the possibility that a non-trivial percentage of the recent run-up of the stock market is based on "dumb money" from unsophisticated investors, much of which they may not actually have? edit: Also I just searched Robin-hood options trading on youtube and this video was the second result: https://youtu.be/EQRLRYvRYOM?t=568 https://youtu.be/EQRLRYvRYOM?t=568 I find the UI effect when he finishes the option buy to be very telling, and it's interesting to think about who the intended audience of this content is.

edoceo 6y ago
Bloomberg thinks 20% of the market is retail https://www.bloomberg.com/news/articles/2020-09-15/big-investors-are-dying-to-know-what-the-little-guys-are-doing https://www.bloomberg.com/news/articles/2020-09-15/big-inves... I don't think we can rule out dumb money. But also, it's not just retail who's dumb.